LONDON (Reuters) - Demand for houses has returned in Britain, but a dearth of building land as sellers sit tight waiting for prices to rise is crimping building activity, the head of housebuilder Redrow Plc said yesterday.

Redrow, which reported a lower first-half loss and healthy trading, said the planning system is also preventing it from ramping up activity to meet demand. "We're desperately trying to increase our debt, we're trying to buy land," chairman Steve Morgan told Reuters. "There's not enough of it on the market. The simple message is, if we had more sites, we could build and sell more houses. There are people who seem reluctant to sell at today's prices."